Japanese Secondary Al Alloy Makers to Offer 5 Yen/kg Hike for September

Japanese major secondary aluminium alloy makers, including Daiki Aluminium Industry and Nikkei MC Aluminium, will offer price hike of alloy ingot by around 5 yen per kilogram for September shipment against the consumers those who set the purchase price unchanged for August shipment. Alloy makers are recently suffered from low profitability due to high cost materials.

Ingot price was almost unchanged for August shipment. In early September, aluminium scrap market price downed by 5-10 yen per kg. At the same time, Russian base metal AK5M2 is arriving which was contracted in May-June at low price. Material costs will lower at Japanese secondary aluminium alloy makers. Meanwhile, alloy makers hold high cost materials procured in late August. Thus current profitability is unfavorable.

On the other hand, AD12.1 grade alloy import is recently increasing from China at the level as high as the recent demand peak in 2007. Japanese alloy makers are afraid that domestic alloy share may be impacted. One concerned source said Chinese AD12.1 may represent 190-195 yen per kg in Japanese market in October thanks to strong yen trend.

Alloy price seemed to lower at a tender held by Japanese major automaker on September 1 for October-December shipment. One trader said there were more bids of imported alloys than usual tenders. Another negative factor is that Japanese governmental program to stimulate eco friendly car purchase was ended earlier than the end of September.